Stricken city’s industry on hold

Business across Christchurch was largely on hold yesterday because of widespread power outages, after-shocks and fears for the structural soundness of buildings.

Road blockages and patchy communications services added to the difficulties, meaning just about the only task many companies could do was the nerve-wrecking accounting of their employees.

Christchurch is New Zealand’s second-largest city and accounts for about 15 per cent of the country’s gross domestic product.

Cameron Bagrie, ANZ Banking Group’s chief economist for NZ, said there would be an immediate hit to consumer and business confidence. Then the rebuilding phase would kick in, providing an economic boost. When that happened all business would struggle for resources, he said, although it would be a way off.

“The construction work from the September quake was just about to begin. It’s going to stop that work and cause people to re-examine because the damage is worse," Mr Bagrie said.

Fairfax Media, publisher of The Australian Financial Review, has suffered severe damage to the headquarters of its Christchurch masthead, The Press. Retailers are suffering acute challenges in keeping shelves stocked. Woolworths, the country’s second largest super­market chain, has 15 stores in Christchurch. Nine were closed early yesterday and six of those have suffered structural damage.

“Like everyone else we will have to deal with road closures and we’ll have to find other ways to get around," Woolworths’ Benedict Brook said. “The wash-up from cyclone Yasi and the floods is we have an updated list of essential items which we will prioritise if we face logistical restrictions."

The NZ head office of outdoor clothing retailer Kathmandu and its distribution centre were damaged. The company said it was unclear when they could be reoccupied.

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Christchurch is a major gateway for the entire South Island and the tourism sector is expected to suffer.

“It’s going to have an immediate and severe impact," said Rowan Barker of the Tourism and Transport Forum.

Qantas and Jetstar had 16 flights between them cancelled or redirected on Tuesday. Christchurch Airport reopened yesterday morning and both airlines have put on additional services.

“We’re going hammer and tongs at the moment," said Jetstar’s Simon Westaway.

“There’s very high demand to get out of Christchurch."

He said passenger numbers had held up after the September quake and Jetstar would work with tourism bodies to stimulate tourism despite the disaster.

Telstra’s buildings in the city are closed and 60 of its exchanges are running on batteries. By yesterday afternoon most of the batteries were ­running low and the company was trying to recharge its exchanges with generators, although contractors were finding it difficult to move around the city.

A Telstra spokeswoman said the phone carriers were in “various stages of disarray. There’s been no cuts to our fibre network but the big issue is power. Power across the city is patchy".

All major banks closed multiple branches yesterday and some had as many as half their ATMs out of order.

New Zealand-based listed property groups are assessing damage to their portfolios. Kiwi Property Trust said its two Christchurch properties, a shopping centre and an office block, had sustained minor structural damage. Westfield’s Riccarton mall is closed and a company spokeswoman said it had suffered localised damage.

Mr Bagrie said the stimulus from rebuilding would mean the earthquake would be net positive in terms of its economic impacts.

Much of that stimulus would lift the performance of building and construction firms. Among them is Fletcher Building, which is already overseeing repairs to homes following last year’s earthquake. A company spokesman said Christchurch remained in “lockdown" with more buildings expected to fall due to damage and aftershocks.

Many of the 60,000 claims made after the previous earthquake would now need to be reassessed in light of further damage from the latest earthquake, the company said.

“The damage looks much more significant than the September 4 earthquake, the rebuilding work is just enormous."